Major NJ Pharma Company To Lay Off Thousands In $3B Cost Savings Plan

RAHWAY, NJ - A leading pharmaceutical business based in Rahway announced a major shift in resource allocation on Tuesday after a subpar global market response to two of its most popular drugs.

In its Q2 financial report, Merck & Co. announced a $3 billion restructuring program that includes immediate layoffs in July across administrative, sales and R&D positions. The number of job cuts in New Jersey or other locations was not specified, and the company says they will continue to hire "across strategic growth areas of the business." Merck employs 75,000 people worldwide. As of June 2023, more than 6,000 of those workers were said to be based at the Rahway site.

Gardasil, a human papillomavirus vaccine, and Keytruda, a cancer immunotherapy drug, have been key growth drivers for Merck. Both products are now in a period of uncertainty now due to various global market conditions and one having its legal exclusivity expiring in a few years.

Keytruda, the world's top-selling drug according to Reuters, will lose patent protection in 2028. This will open the door to biosimilar and generic competition. Keytruda was first approved in 2014, and in 2023, was responsible for 40 percent of Merck's pharmaceutical sales. Sales are expected to drop by 19 percent in 2029 to $27.4B, down from $33.7B in 2028.

Merck is working to get a patent on a subcutaneous version that can be injected under the skin. Tahir Amin, co-founder of drug patent watchdog group Initiative for Medicines, Access & Knowledge, says this would protect the formulation until at least 2040.

On Tuesday, Merck announced it was extending the hold on shipments of Gardasil to China until at least the end of the year due to a drop in demand, sending the company's shares down by eight percent. Much of the growth for Gardasil on the global market has come from China and Japan. They are now focusing on newer drugs, like lung disease treatments Winrevair and Ohtuvayre, acquired in their $10 billion acquisition of Verona Pharma.

Under its new restructuring footprint, Merck is set to save $3 billion annually by the end of 2027 through job cuts, reducing physical location space, and optimizing its manufacturing network.

Merck returned to its Rahway roots in 2023, after eight years in Kenilworth and 23 before that in Whitehouse Station. A $450 million learning and manufacturing facility, a multipurpose auditorium and added parking all can be found among the 100 buildings that make up the 200-acre grounds. As of July 30, the company lists multiple positions they are still hiring for at its Rahway headquarters.

In just March, Patch profiled Merck & Co. for its appearance on the Forbes list of America's Best Employers.